Demystifying B2B Marketing ROI A Guide for Marketers Responsible for Driving Growth through Paid Channels

eBook

Measuring ROI from paid marketing for B2B is a critical problem a lot of marketers are trying to tackle. B2B marketing is not transactional, most marketers know this, but it is easy to forget. ROI is measured along a cycle that could span weeks or months depending on your industry and business model. During this time, the customer engages with your brand in a variety of ways.

How many times have you heard someone in sales say, "the quality of these leads is too low!" Or has your CEO asked where the company should double down on budget to increase revenue? If you are at an agency, are your clients knocking on the door saying they need more leads? Or perhaps your head of marketing may want to know how many leads turned into customers last quarter and what was the impact on revenue?

The Demystifying ROI for B2B Marketers eBook tackles the questions marketers are faced with on a daily basis and provides solutions that you can start implementing immediately to hit short term goals as well as best practices that will help you achieve strategic goals.

Introduction

About AdStage

Our customers have run over 4 billion dollars worth of ad spend through our platform on networks like Facebook, Google, Instagram, LinkedIn, Twitter, YouTube, and Bing. Our experience in this space has given us a holistic understanding of platform nuances, industry trends, and where and how we can help marketers navigate the complicated digital landscape.

Our core technology is a Saas cross-channel paid media analytics and optimization platform used by brands and agencies to accelerate ROI. Marketers can report, optimize, and scale their advertising across networks with AdStage.

If you are interested in learning more about how AdStage technology can help your organization drive higher results for you paid marketing efforts, contact us at info@adstage.com or visit us at AdStage.io.

To stay current on the most recent trends in paid marketing and to receive the latest news about major digital ad networks, follow us on Twitter @adstage and subscribe to our popular newsletter.

Demystifying B2B Marketing ROI

Contents

TRACKING EVERY DOLLAR 5

CREATE KPIS AND MEASURE OUTCOMES

10

MEASURE PIPELINE CONTRIBUTION BACK TO PPC CAMPAIGNS

22

DETERMINE ROI AND REPORT REGULARLY 34

TRACKING EVERY DOLLAR01

Data Is Changing The CMO Role

Five to ten years ago, marketers were seen as cost setters, not revenue driving setters or growth setters. That has totally changed. Now more than ever, marketers are just as responsible for revenue as the sales team. To meet this challenge, marketing teams must be made up of sophisticated staff that understands the critical nature of their role and knows how to get the job done.

In the past, tracking the ROI of a digital ad was similar to how billboards are still measured today–throw it up and hope for the best. There was no good way to measure the effectiveness of what brands were sharing. That lead to lots of top-of-funnel effort: views, impressions, clicks, etc. No doubt those traditional marketers were driving revenue, but no one could effectively measure the impact.

Today, with the advent of tactics like remarketing, and uploading custom audiences to target people at specific stages, we can effectively carry out full-cycle marketing. Marketers now have the strategy and knowledge (and responsibility) to close the loop!

Accenture, C-level disruptive growth

As the Spider-Man phrase goes, “With great power, comes great responsibility.” Marketers can now access data further down the funnel, which makes us responsible for reporting on those metrics with granularity. Clicks and impressions just don't cut it anymore. Additionally, CMOs are expected to shoulder the burden for growth and will be held accountable if revenue targets are missed. One study by Accenture listed the CMO as the role most likely to drive disruptive growth.

The Modern Marketer - Still Duct-taping Data Together In Excel

The modern marketer is overwhelmed with the amount of data inputs, sources, channels, and tools available. They’re constantly trying to understand the customer journey across online and offline tools, and a lot of times those systems don’t talk to each other. This forces the marketer to try to duct tape all the metrics together in Excel and Google Sheets, and hope none of their formulas break. This process is excruciatingly time consuming and prone to error. Not to mention, impractical if a business needs to scale quickly.

Invest in an automated solution! To make the biggest impact on the company's bottom line, marketers need the tools that will help them be successful and efficient. A marketer's time is too valuable to be spent sifting through data and trying to cobble it all together.

The marketing landscape today consists of a wide range of tools to measure and optimize everything from content to campaigns. This also means that your competition is likely taking advantage of data and technology to improve their own marketing. Since you can now automate tasks that are sucking up loads of time, a million rows in your Excel sheet isn't something to brag about, it's something to streamline!

Automate the consolidation of data to focus on the stuff that matters!

● Automate repetitive tasks

● Monitor budgets & KPIs

● Visualize metrics quickly

● Project goals

CREATE KPIS AND MEASURE OUTCOMES02

74% of companies that weren't exceeding revenue goals did not know

their visitor, lead, MQL, or sales opportunities.

HubSpot Demand Generation Benchmarks Report

“

The Customer Journey Is Changing

Marketing takes time. Not everyone who comes to your website is ready to buy. As an example–think about your last trip to a physical grocery store. Just because you're walking around the store with an empty cart doesn't mean you're ready to buy everything you see (even though the large bag of chocolate peanut butter cups are tempting).

A lot of people think the customer journey process is linear, but there are many different touchpoints where someone is thinking and considering before they're actually ready to buy. It's not about A to B to C anymore. Today's customer journey is eccentric and complicated and marketers have to understand each of these points in depth because effective content and efforts are going to differ depending on where someone is in the process.

It’s time to rethink your B2B buyers’ journey. Most marketers are familiar with the funnel on the left–a linear, straightforward process. But the reality is that the modern buyer's journey is a lot more complicated as a result of technological advancements in media, on advertising platforms, and certainly the invention and progression of mobile phones–the addictive supercomputers in our pockets.

In a true buyer's journey, people go backward and forward. Successful marketing teams accept this and build campaigns, programs, and reports that support real-world behavior. Instead of trying to force the buyer along in a linear journey, they meet buyers where they spend their time and understand a buyer's true behavior.

In a B2B buying decision process, a customer will pass through 7-14 touch points on average. Not only is it important to uncover each of those touchpoints, but the messaging should be tailored to individual as well. The same software, for example, might be evaluated by a buying committee that consists of a VP, Director, and Practitioner. They are all looking at the same product to meet different needs. The VP might be concerned with top-line benefit. The Director may be concerned about meeting specific goals and staying within budget. The Practitioner might be evaluating ease of use. But before they even get to the stage of evaluating your product, they are are evaluating your brand. This why it is so important to deliver value to your customers well before they even start considering your product.

Traditional funnel Reality

Are you familiar with the Iceberg Principle? It states that only a small amount (the 'tip') of information is available or visible when the 'real' information or bulk of data is unseen, deep down in the water.

Today, too many marketers are still floating at the surface level, focused on high-level metrics that won't tell you much about your impact on ROI. Metrics such as “impressions” are sometimes diminutively called, “vanity metrics.” Metrics that might make a marketer feel good, but deliver little value.

So how do you bridge top and bottom together?

The Marketer’s Iceberg

As recently as 5 years ago, marketers were fully focused on clicks, but missing out entirely on quality, and therefore actual value. You can drive 100,000 people to your site, but that doesn’t matter if they’re not taking action beyond that. By focusing on top-of-funnel metrics, you’re missing the whole story, and more often than not, when you dig deeper, you might find out that you’re driving the wrong kind of traffic.

A click is just a small part of the overall story. In a marketer's iceberg, at the absolute very least, you must ensure that you’re optimizing for MQLs (Marketing Qualified Leads). But to be truly successful, you have to go even deeper, and optimize for SQLs (Sales Qualified Leads) and beyond.

Here at Adstage, we have a weekly meeting called "smarketing," which is a meeting between our sales and marketing teams. The purpose of this meeting is to ensure the two teams are driving to the same goals. This concept is become increasingly prevalent. Chief Revenue Officers are also becoming more common with both marketing and sales reporting into them.

So don’t stop at MQL. Go deeper! The meaningful data lies beneath the surface.

MQL vs. SQL: What's the Real Difference Between Marketing Qualified Leads and Sales Qualified Leads?As marketers, we already know there are a ton of acronyms used in our industry – PPC, CTR, BTC, KPIs – and so many more, it can have your head spinning. So here are two more important lead generation abbreviations that your internal teams need to understand in the context of your business: MQls and SQLs. Below, we’ll go over how they are different; how they relate to each other and your business; and how to attract the leads that are most likely to become your strongest customers.

Qualified LeadsBefore we dive into MQLs, let’s take a step back to take a look at more general qualified leads.. This lead is top-of-funnel and likely knows very little about your company and/or the solutions you provide. Therefore they are not yet willing to take much action on their end. The level of information that you can expect to get for these types of leads is their name and email, not much more. But to most marketers, an email address is the Holy Grail gateway that enables you to engage these leads with useful content like free e-books, webinars, and case studies, The hope is that this type of content will nurture those leads into becoming a Marketing Qualified Lead.

Marketing Qualified Lead (MQL)A Marketing Qualified Lead is what many good marketers today are concerned with attracting. An MQL is someone who actually takes you up on an offer by downloading an e-book or case study, joining a webinar, etc. Hubspot defines MQLs as “contacts who have engaged with the team's marketing efforts, but are still not ready to receive a sales call. An example of a MQL is a contact who respond to a specific form in a marketing campaign.” He or she has shown another level of interest in your content or company. Depending on your product and business, you may continue marketing to this lead with more information about your company and products/services, or you may jump to offers that would encourage this person to evaluate your offering more closely, eventually becoming a Sales Qualified Lead. Example offers would be free product trials, consultations, or anything else that would allow them direct access to the product. If the MQL accepts the offer, then, and only then, would you pass him or her on to sales.

Sales Qualified Lead (SQL)An SQL is someone who has demonstrated interest in your product/service directly, perhaps by filling out a demo request form. But in order to be considered an SQL, they should also meet your criteria. For example, if you sell a marketing product geared toward “mom and pop” shops, a call from Apple might be exciting, but your product likely isn’t suited for their needs. SQLs are the hottest and strongest leads, and should be followed up with quickly to maintain the interest that developed during their buying journey.

QL → MQL → SQL Real World ExampleLet’s say your company makes an improved to-do list management system. A brand new way to get things done faster, with integration in all aspects of life on every device possible. How could someone not want to use it...right? That’s where our job as a marketer comes in.

Here’s the example—A prospective customer comes across an article on your blog via a search. She likes your productivity life hacks and decides she wants get more tips. She signs up for your email list and is now considered a QL. She’s given you, the marketer, a little piece of information about herself that you can use to further engage her.

Now that she’s on the list, an email is sent with more information about advanced hacks. A follow-up email includes an invitation to download some case studies showing how past customers have used your your super awesome new and improved to-do list thingamajig to become 10x more productive in their daily lives. The prospective customer downloads the case studies. She’s now an MQL. She has taken pointed action to learn more about your business and the solutions you offer. After she has some time to digest the case studies, you follow up with another triggered email offering a 2-week free trial. She is flattered and excited and initiates her free trial immediately. In order to initiate the trial, you gather some more information about her and learn that she would be the perfect customer for your product. She is now considered an SQL, ready to receive messaging that encourages her to become an actual customer.

Defining Lead TypeYour organization may already have a system for labeling lead types, possibly as part of your CRM. But if not, you can create something as simple as a checklist that each lead needs to satisfy before becoming an MQL or SQL. Or you can go deeper and set up closed-loop reporting. Closed-loop reporting helps track customer journey metrics from first contact to purchase. Because customers are going through many different touch points as they transition from QL to MQL to SQL, it’s important to understand where the process is working (and put more budget to it), and where improvements can be made.

Can You Skip The MQL Phase?Yes and no. You shouldn’t build your marketing strategy around trying to shorten the timeline and usher prospective customers straight into the SQL bucket. It’s so important to make sure any lead you might label as an SQL is truly ready to be sold to. Otherwise, you risk a lot of turning off potential customers and it will be very difficult to regain their trust. This can ultimately lead to wasted marketing budget and less incremental revenue for the business.

However, it is entirely possible for a prospect to pop up on your radar who has an immediate need and interest in your product, It might be through their own research, or word-of-mouth. In that case, as long as the lead satisfies all the requirements of being an MQL, you can move them right along to sales. Think of it as a type of sequential advertising you might run on Facebook. You want to make sure you’re hitting your customer with the right message at the right time, never moving too quickly or bombarding him or her with repetitive messaging when they’re actually ready to commit.

As you can see, there’s quite a big difference between MQLs and SQLs, and developing and handing them off correctly is the make or break between making or losing a sale. Marketers should work closely with the sales team to determine the best way to bridge communication and hand off the relationship.

Tracking the JourneyWhat online conversion goals should you track? All of them! Free products like Google Analytics make this super easy, and of course, Adstage helps you automate and track just about anything you want to.

No matter what you're using, track all possible conversion touchpoints to understand how users engage with your brand throughout their lifetime.

From the list below, every single metric should be tracked as a goal, and they should all be taken into consideration when you’re iterating or testing new messaging or positioning.

Goal = Engage / Nurture

● Newsletter Sign-ups● Calls● Downloads● Demo Requests● Trial Starts● Salesforce Opportunities● Conversion to Customer

“Forrester Research

Less than 1% of leads will ever become customers.

Lead = 5%

MQL = 20%

SQL = 50%

Opportunity = 20%

Customers = 50%

Understand Your Business With Marketing Math

NUMBERS

Visitors = 50,000

Leads = 2,500

MQL = 500

SQL = 250

Opportunities = 50

Customers = 25

CONVERSION

RATES

1%of

leads

Every single lead needs to be cherished and every single lead requires a fair amount of nurturing. To make sure you’re running a profitable program, you have to make sure you’re treating every lead as high value. Ok, but what about those low-quality leads? The idea here is that if you align everything, you’re already driving leads that are high quality so sales and marketing will naturally care about them.

The metrics below are what everyone’s daily dashboard should show. Then, knowing that 1% of leads turn into customers, work backward with this math. If you know that you need to drive more SQLs, for example, you can prioritize which initiatives or projects you need to work on. Use this math to identify the lowest hanging fruit or projects that can help move the needle the most.

Play around with this formula to better understand your funnel. This exercise will help you identify stages where you might be losing good prospects and were to focus. On top of this formula, you MUST have a system in place to track your efforts, especially if you’re spending money to acquire customers. Otherwise, you won’t know your ROAS (Return on Ad Spend) and therefore won’t be able to measure how effective your efforts were at producing results.

The Takeaway: The less companies know about their KPIs, the less likely they are to meet their revenue goals.

MEASURE PIPELINE CONTRIBUTION BACK TO PPC CAMPAIGNS03

“Peter Drucker

If you can't measure it, you can't improve

it.

How You Optimize Determines Whether You Lose Revenue or Make It!

In the example you spent $5k for 50 leads at a CPL of $100 on Facebook. In comparison, on LinkedIn, you spent $10k for just 20 leads at a CPL of $500. So your marketing instinct would tell you to pause the high-CPL campaigns. In this case, you might choose to pause LinkedIn.

BUT, there is more to this story...

Channel Spend MQL CPL

AdWords $15,000 30 $250

Bing $5,000 25 $200

Facebook $5,000 50 $100

LinkedIn $10,000 20 $500

Total $35,000 125 $280

Focus here

Cut here

We discussed the various types of leads in the previous section. With all the data that is now available, which metrics should you optimize for? We know optimizing for absolute top of funnel, like impressions and clicks, might make you feel good, but likely won’t yield the kinds of returns you need to grow your business. Take a look at the table below. If you were to use this data, which ad would you dial-up?

Remember the Marketer’s Iceberg? Smart marketers know they have to go deeper than the surface, beyond analyzing MQLs, to reveal the whole story. In the example on the previous page, let’s follow those 50 Facebook leads, and 20 LinkedIn leads to see how many actually converted into customers and impacted revenue.

Channel Spend MQL CPL Customers Revenue ROAS ACV

AdWords $15,000 30 $250 4 $32,000 213% $8,000

Bing $5,000 25 $200 3 $15,000 300% $5,000

Facebook

$5,000 50 $100 1 $4,000 120% $4,000

LinkedIn $10,000 20 $500 4 $32,000 320% $8,000

Total $35,000 125 $280 12 $83,000 243% $6,917

If you take a look at the MQLs that turned into actual paying customers, those who came from LinkedIn not only converted at a better rate, the ultimate impact to revenue was $32,000 vs. $4,000 from the Facebook leads. This example is just illustrative. The channel that will yield the best results for you depends on your strategy, business, and industry. In the scenario above, if you had optimized for Facebook, you would have missed out on the significant revenue that came from LinkedIn.

The Takeaway: Not all leads and networks are created equal.

When we dig deeper to reveal the whole story, we find a completely different ending. A plot twist!

Bonus! You now have the data to ask for more budget. This type of data is good news for the 27% of marketers who say securing enough budget is their top marketing challenge.*

If you’re tracking campaigns back to opportunities and actual revenue, you can now justify your ask for more budget! The math is simple, even though getting this information might not be as easy. We will discuss the challenge of tracking and obtaining data that links ad data with revenue in the next section.

Projection: $5,000 more ad spend will net another $16,000 in revenue.

Channel Spend Lead (MQL) CPL Customers Revenue

LinkedIn $15,000 30 $500 6 $48,000

Channel Spend Lead (MQL) CPL Customers Revenue

Facebook $10,000 20 $500 4 $32,000

* Hubspot State of Inbound 2018 https://cdn2.hubspot.net/hubfs/3476323/State%20of%20Inbound%202018%20Global%20Results.pdf

Online TrackingVisitors

to Leads

Offline TrackingLeads to

Customers

WEB CONVERSIONS

Online TrackingStrangers to Visitors

AD DATA

CRM

Now we'll dig into how to surface the numbers you need to accurately prove ROAS. But first, let's take a look at some of the gaps in reporting so we can construct a way to capture the missing information.

By default, Google Analytics doesn't track offline revenue. For B2B marketing, this is a big issue since most sales don't happen online; they are closed by sales people, either in person or over the phone. Google Analytics doesn't have access to these sales, so you have no idea how much revenue was generated by a certain approach, ad, article, or keyword. If you can’t connect this data, your spend will go toward leads that are unlikely to turn into paying customers.

How to Connect Ad Data to Down-Funnel Metrics Like Revenue

Use Hidden Fields To Pass More Data Into CRM

The vast majority of B2B companies use forms as a lead capture mechanism on their websites.

For these forms, businesses generally rely on a third-party marketing automation system like Marketo or HubSpot. When a form is built, you can embed hidden fields called UTMs (Urchin Tracking Modules), which help you capture additional information when someone fills out and submits the form.

On a form, you’re likely already tracking things like name, company, and email address. But you also want to know where the person came from. How did they land on this page? You can use these hidden fields, or UTMs, to learn this information.

Using UTMs, you can track back to parameters like content, medium, or source.

When you send all this information along to your CRM, you can also include these referral tracking parameters.

We like G-Connector for Salesforce to pull reports into Google Sheets or export into Excel.*you will need a Salesforce login to complete set-up

The next step requires you to pull your CRM reports. If you’re doing this manually, you will need to download all of your ad data down to the URL because that’s where your tracking parameters are (the UTM parameters). Then put all this information into Google Sheets. For the CRM side of the data (we use Salesforce in this example), use G-Connector to pull data from Salesforce and drop into your Google Sheets.

You could run reports such as an opportunity report or a lead report. In that report be sure to expose the UTM parameters as columns. Now it’s time to play the the matching game. Drawing lines from one side to the other side, using VLOOKUP to match the data sets and try to combine them into one set. Beware, this can be very manual, time-consuming, and prone to error.

CRM DATA

AD DATA

WEB CONVERSION DATA

The process doesn’t have to be manual. There are tools like AdStage that can do all of this work for you, and take it one step further. Once you match the data up, visualizing, analyzing, and taking action on the data is the critical part of this exercise. By understanding the story the numbers are telling, you can more effectively optimize campaigns and drive growth with a healthy ROI number!

Showing the Value of your Ad Campaigns

This will help you identify how you can optimize on the campaigns that matter. In the example above, you can see that the CPA for AdWords is significantly lower than for Facebook. However, remember, this is only part of the puzzle. We still want to be able to connect the journey to actual sales data.

If you can map your offline conversions to online campaigns, you want to end up with a table like the one below. An easy, visual summary of your results and progress that shows spend, MQLs, SQLs, and most importantly, cost.

DETERMINE ROI AND REPORT REGULARLY04

“HubSpot

Marketers that calculate ROI are 1.6X more likely to receive higher budgets.

Create Marketing Dashboards To Align With Sales

Salesforce dashboard by source

CRM tools used to be the sales person’s domain, but marketers are now using them as well. Because we’re smart marketers, we’re technically the ones that sent a lot of the data into the CRM systems through forms and hidden fields. It makes sense that we should now leverage it!

One important piece of information missing in the CRM is the ad cost. If you just report in the CRM, you’re not going to be able to optimize to the actual ad that delivered those customers. You will have to bridge that gap either manually in Google Sheets, or automatically through a technology like AdStage.

The Takeaway: Marketers need to get comfortable navigating CRMs, and understand that critical pieces of data can be found in them.

By connecting your ad data to sales data, instead of reporting on clicks, you can report on revenue. With this approach, you can show marketing’s contribution to the sales pipeline and also prove how much marketing is contributing to drive SQLs, closed deals, and ultimately revenue. Today, this is how the best marketing teams are run. The more you can prove out what you’re doing, the easier it will be to scale your contributions to the business, and also scale your own growth professionally.

Once you can link metrics that illustrate a customer’s entire journey, you can finally dial-up campaigns that actually work, and turn off the ones that don’t yield bankable results. In essence, you stop optimizing for leads, and start optimizing for customers. For example, in the table below you can clearly show which ad network yields the best return. You can then make a more informed decision on how to allocate budget.

KPIs to Measure

SQLs are the new MQLs

Sales and marketing alignment is more important than ever and when marketing is measuring for sales goals, a natural bridge is formed.

Contribution to pipeline

Marketing can grow its value to the organization by focusing on leads that are more likely to turn into paying customers.

Contribution to closed-won deals

Ideally, the sales team is giving credit to marketing every time a close bell rings. The organization as a whole should strive to understand where the lead came from and the steps along the way that helped close the deal.

Actualized revenue from marketing campaigns

You should be able to answer “What is my ROAS from a my spend?”

✓ Track every dollar spent

✓ Create KPIs and measure outcomes

✓ Track pipeline back to ad campaigns

✓ Determine ROI and report out regularly

✓ Test, iterate, and optimize

Pro Tips for Measuring and Optimizing B2B Ad Campaigns

Avinash Kaushik

CPC is not a Key Performance Indicator... Here's what you should actually care

about: Profit Per Click.

About AdStage

If you are interested in learning more about how AdStage technology can help your organization drive higher results for you paid marketing efforts, contact us at info@adstage.com or visit us at AdStage.io.

To stay current on the most recent trends in paid marketing and to receive the latest news about major digital ad networks, follow us on Twitter @adstage and subscribe to our popular newsletter.